cmr insights

I spent time in the Top End last week including a day in Batchelor. I spoke to a number of people including CMR employees, Contractors and Batchelor townsfolk.

This the information I have gleaned:

- update coming to market soon (expect over next week). Will reconfirm previous statement re nature and extent of cost overruns ($20-30M)

- At least 3 staff responsible for getting plant up and running have been sacked/have walked in recent months. This included the Project Leader who had been responsible for dis-assembling the plant from Cawes and who made a total F**k up of re-assembling it for CMR. The plans, if any, he was using to assemble were very far from best practise...This has now been rectified with detailed plans and much more accountability regarding the construction.

- very detailed review undertaken and dont expect any further delays or issues to now arise with construction. However once producing in any new operation things normally take a few months to hit close to 100% efficiency

- approx 23 CMR staff and 130 contractors on site. All appeared very busy and from all accounts (from various people) the workers now there are highly competent. Its a big project of very impressive scale - seems like this had been underestimated initially

- overall complexity of oxides/sulphides operation is quite low. The resin process is quite new to Oz and therefore relatively untested but should be OK

- historically very good exploration group but recent focus has now been on ramping up production capability within group (eg new GM Operations, Sulphides plus numerous other appointments)

- tight labour market but Coy has all but perhaps 2-3 of the skilled staff they desire.

- I personally expect the project is a definite starter in the first half of next year.

- large amt of drilling occuring this year. Big delays getting results from labs. Should have resource upgrades late this year/early next year

- sulphides project is the real money. Almost certain to go ahead but need to get thru environmental survey first

- Seemingly no risk of Chinese pulling out at this stage. They thought CMR was ambitious with initially production timings and therefore were half expecting delays

- People in the town (approx 7 people I spoke to) are generally supportive of project. House prices have almost tripled in last 3-4 years (is that you buying Oly? ;-0)

- I might head back there over coming months to get further updates however I have retained certain peoples details that I met

will post more if i remember it

cheers